Court: Age discrimination unproven in Boeing sale

By ROXANA HEGEMAN | August 27, 2012 | 7:36 PM EDT

WICHITA, Kan. (AP) — A federal appeals court ruled Monday that former employees of The Boeing Co. failed to demonstrate a pattern of age discrimination in the wake of the 2005 sale of its commercial aircraft business in Kansas and Oklahoma.

Ninety former Boeing workers sued in December 2005 claiming they lost their jobs because of their age when the Chicago-based aerospace manufacturer sold operations in Wichita, Tulsa, Okla., and McAlester, Okla., to Onex Corp.

Onex formed Wichita-based Spirit AeroSystems to handle the business.

Their lawsuit was granted conditional class-action status in 2006 under the Age Discrimination in Employment Act.

The 10th U.S. Circuit Court of Appeals agreed Monday with the 2010 decision of U.S. District Judge Eric Melgren, summarily siding in favor of the aerospace giants. Melgren found there was too little evidence to put the case before a jury.

"Although the Employees have provided evidence that discrimination occurred during Boeing's divestiture of the Division, we agree with the district court that the Employees cannot prove a pattern or practice of age discrimination," the appeals court wrote.

In its 47-page ruling, the appeals court said while older employees "fared slightly worse" than younger ones, they had failed to show the companies' hiring practices unfairly hurt older workers. It also agreed with the lower court's finding that the ex-employees failed to show the companies intended to interfere with their pension benefits.

The companies had argued they expected Spirit would save money by paying its workers less and employing fewer of them. Its labor contracts provided wages higher than the market required in Wichita, Tulsa and McAlester, and it believed a new company would be able to negotiate less costly labor contracts, according to the filing.

Its labor costs were also high because of the age of its workforce after seniority-based layoffs in the early 2000s eliminated many younger employees. The plaintiffs argued the companies planned to cut costs by getting rid of older, more expensive workers.

But the appeals court found that the former employees cannot prove that such a scheme existed.

The sale closed on June 16, 2005, and Boeing terminated all 10,671 workers. The next day, Spirit rehired 8,354 employees, who had been selected by Boeing managers, the court noted. Employees older than 40 were recommended and rehired at slightly lower rates than younger ones. The average age of Spirit's workforce was 48.2, about five months younger than Boeing's workforce in those operations the day earlier.

Spirit AeroSystems emailed a short statement Monday, saying the company was pleased the appeals court upheld the previous ruling.

"The court made the correct decision. It speaks for itself," Boeing spokesman Chaz Bickers said in an email.

The appeal affected only the class-action litigation. Individual workers could still pursue multiple, separate age discrimination lawsuits.

"We are disappointed in the outcome of the appeal," said Lawrence Williamson, the Kansas City, Mo., attorney representing the workers. "The decision only finds ... we can't meet the legal threshold of pattern or practice point, but does not remove any of the individual claims for the plaintiffs. And we will consider all options, including asking the Supreme Court to take a look at the decision."